Economic historians widely acknowledge that historical price data are measured with error. This column collects pre-WWI inflation data from 15 countries and uses instrumental variables to estimate inflation persistence that is unaffected by measurement error. It finds that the persistence of inflation is much stronger than previously estimated when accounting for measurement error, but still […]
The inflationary episode from 2021 to 2023 reignited the debate on the nonlinearity of the Phillips curve. Aggregate and city-level data indicate a non-linear relationship, with inflation accelerating rapidly when the vacancy-unemployment ratio exceeds one. This column argues that the evidence for a non-linear Phillips curve is fragile and depends on the model specification and […]
Consumers have vastly different views about inflation – shaped by personal experience, financial literacy, and exposure to economic news. This column examines how consumers’ housing status shapes the attention they pay to inflation and their subsequent spending decisions, demonstrating marked differences between renters and homeowners. In an experiment conducted with US households between 2021 and […]
